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Management, Unions Reach Agreement,
Bringing Strike at Banespa to an End

Dow Jones Newswires

Updated Nov. 10, 2000 1:52 a.m. ET

BRASILIA, Brazil -- A strike that has paralyzed operations at Brazil's eighth-largest bank since Oct. 31 ended Thursday after unions and the bank's management reached an agreement resolving differences over salary and other issues.

Since last week, the 573 branches of
Banco do Estado de Sao Paulo SA,
or Banespa, have been closed as employees have protested over pay levels and government plans to sell its controlling stake in the bank at a minimum price of 1.85 billion reals ($939.9 million). The unions believe the sale would lead to thousands of job losses.

Banespa's 21,000 employees are expected to return to work Friday.

The agreement comes after the supreme labor tribunal said management at Banespa, as the bank is known, has agreed to a higher annual salary increase than the previously offered 5%. The unions are looking for an increase in salary of between 7.2% and 9.2%.

Also, the bank has agreed to pay employees for the days that they were on strike.

Banespa is Brazil's eighth-largest bank with 28.66 billion reals in assets, according to the central bank's June survey. It serves the country's wealthiest and most populous state of Sao Paulo.

The agreement also includes a clause granting workers a cut of the bank's 2000 profit, valued at up to 3,250 reals per employee. The payment, to be issued Dec. 31, 2000, applies only to this year.

The unions caved in over the job security issue in exchange for a higher salary. If an employee is fired before May 1, 2001, the worker would receive additional indemnity payments of up to three months' salary. The unions wanted all employees to have their jobs guaranteed for the next year.

Joao Vaccari, president of the Sao Paulo Bank Workers Union, said the union wouldn't give up its fight to guarantee jobs -- especially if the government succeeded in selling its stake in the bank.

The strikes in the last week focused on contracts and not the sale, he said.

"We are sure the [Banespa] sale will not go through on Nov. 20," said Joao Vaccari, president of the Sao Paulo Bank Workers Union. "'We will continue to protest is all forms possible against the sale, since we continue to believe that the bank should remain in federal hands."

Mr. Vaccari said he was confident lawsuits seeking to block the sale will be judged before Nov. 20.

Recently, injunctions against the sale have been swiftly knocked down by Brazil supreme court, which has declared that any delay to the sale is contrary to Brazil's economic interests.

To overturn a decision based on merit, though, the government must appeal to a higher court and ask for the ruling in the lower case to be suspended while the decision is being made.